TaylorMade CEO Dishes on Tiger Signing

Rick Young

Rick Young

On Sunday evening after TaylorMade brand ambassador Tiger Woods put an exclamation point on one of sports’ great personal and professional comebacks — with an emphatic thump of his famous Scotty Cameron Newport 2 GSS putter on the 18th green at Atlanta’s East Lake GC — I immediately recalled a conversation I had earlier this year with TaylorMade president and chief executive officer David Abeles.

Let’s be candid here: When TaylorMade signed Woods to a multi-year endorsement deal on January 25, 2017 the Carlsbad, Calif., company and its highest-ranked executive had no idea if the 14-time major winner would ever strike another competitive shot in a PGA Tour event. What they were partnering with at that point was effectively a legacy, a player acknowledged to be one of the two greatest players ever but someone whose future was more certain off the golf course than on it.

Abeles and his executive team knew all of that. They were more than aware of Woods’s medical status relating to his back issues; how long he’d been away; and just how uncertain, bordering on improbable, his return to professional golf seemed to be. Taking all of that into account, TaylorMade and its CEO signed off on the deal anyway. They accepted the risk with barely a hint of hesitation.

Not even two years later, TaylorMade’s signing of Woods looks like a lottery win.

“I’m optimistic he makes a comeback, not only to compete at a high level, but to win,” Abeles told me during a conversation we had at the 2018 PGA Merchandise Show. “He’s going to play his way right back into this.”

Crystal-ball forecasting aside, it’s been quite a corporate run for Abeles at TaylorMade. He returned to the company to accept the reigns of chief executive in March 2015. At the time, the adidas-owned golf brand was doing its best to wade through a number of internal business and operational issues — global inventory, distribution and logistics concerns, supply chain problems — but the brand’s product direction at that juncture was at a proverbial crossroads.

“We were a bit out of balance with which technologies should come to market,” Abeles explained. “When I came back I took a hard look along with our R&D team at the advanced technologies we were working on; took a hard look at what was going on in the marketplace and we made a decision, literally within the first week of my return, that it was time to bring a very different construction story to TaylorMade, very different construction story to golf. That turned into the launch of the M1 and, eventually, the M2 drivers. That was the first big decision we made.”

Abeles refers to that driver as “a pivotal moment in time for TaylorMade.” Launching M1 didn’t just change consumer minds; it changed mindsets, especially relating to TaylorMade innovation and performance standards. With a single product the company’s technical precedence and reputation, founded on the vision of Gary Adams in 1979, returned.

“It was critical for us to show golfers around the world at every skill level that if you want advanced technology and meaningful performance, M1 had it,” said Abeles of the near paradigm shift. “What that driver also did was it enabled us to re-establish how we manage product lifecycles in market by lengthening the term of the product, giving consumers more time to play them and establish the perceived value of those products. M1 in many regards did that. It reset TaylorMade.”

Then the phone call came. Abeles had just returned from an overseas board meeting at adidas AG headquarters in Germany where, on the agenda, was a discussion on future options for TaylorMade, one of those being the potential sale of the brand. Just five months into his tenure as CEO more uncertainty awaited in prospect.

“I was at gate C8 at San Diego airport, it’s early August 2015 and I got the call from my boss at the time, Herbert Hainer. He told me that a decision had been made to explore the potential of selling TaylorMade, not the decision to sell, but to see what the market would bear.” Abeles recalled. “It was a very thorough, deliberate process with all of the team leaders looking at what the best long-term outcome for TaylorMade would be.”

A little more than two years after the sale was initiated on August 15, 2015, a deal was struck for private equity firm KPS Capital Partners to assume ownership of TaylorMade after 19 years under the publicly traded umbrella of adidas. According to Abeles, it has worked out in all of the principles best interests.

“The time was right for them to sell and the time was right for us to become a private company,” he said, “because being a privately held company in this industry, as you know, comes with a lot of advantages along with the expertise KPS has in a number of strategic areas. They see us as a growth opportunity, a significant one, I would add, and a very meaningful investment for their portfolio.”

Intriguing to me was Abeles’ response when I asked about the legacy of TaylorMade under adidas’ watch and a relationship, even now nearly a year after the sale closed, is still hard to separate.

“It’s a fair question,” he said. “Over 19 years adidas was an incredible owner. That relationship allowed us to bring a performance factor to our company that perhaps we didn’t have. Adidas had resources on a global basis that enabled us to expand our global distribution and our global presence. Quite candidly I would also tell you this: when they bought the company, we were a good U.S. company that did okay and when they sold TaylorMade we were this global entity that had a prominent position on a global basis across key golf categories. The legacy is a great one, it’s very well intact and it’s one we look back on fondly. I’m proud of it.”

That said TaylorMade has flourished under KPS Capital Partners. Since the launch of M1 and M2 the company has enjoyed success right across the board with tour and consumer validated franchises, led this season by the M3 and M4 drivers, P790 irons, TP5 and TP5x golf balls, Spider putters and Milled Grind wedges. Abeles could not be more bullish on the current state of the brand.

“For the first time, after 15 years at TaylorMade and these last three, I can honestly say that I believe we have the best technology in golf through the entire bag, not just in metalwoods,” he said. “That’s not where we were three years ago. Right now we have a leadership position in metalwoods, a strong position in irons, and I think with P790 doing what it’s doing, along with M3 and M4, I think we will be the irons market leader by the end of 2018. There is strength in our wedge and putter business and our golf ball business, for the first time on a global basis, is reaching double-digit market share. That’s a first for us.”

Abeles didn’t come right out and say so but it was clear he’s proud of the entire TaylorMade golf ball division, especially the five-layer TP5 and TP5x used by world No. 1 Dustin Johnson, world No. 2 Justin Rose, Rory McIlroy, Jon Rahm, Jason Day and several more of the TaylorMade tour staff. The CEO credits the golf ball in particular as the key ingredient in TaylorMade being able to sign McIlroy only 10 weeks after it landed Woods.

“It won him over. Rory knew we had great metalwood technology and knew we could build him a world class set of irons but he wanted to ensure he could play a golf ball best in class,” he said. “TP5 and TP5x did that for him. One of the great stories on that is Rory playing with Jon Rahm at Augusta last spring when he’s making a decision and realizing what our ball flight does especially in tough conditions, particularly wind. You won’t find a bigger proponent of our ball than Rory.”

TaylorMade’s reputation also had crossover appeal to non-contracted players. When Nike Golf left the hard goods space in August 2016 its entire staff became equipment free agents. Of the 25 notable names that could play whatever brand of gear it wished, 22 of those players wound up coming to TaylorMade that summer in one or multiple categories.

“When players play our products without contractual obligations it’s a strong statement of validation,” said Abeles. “We have always said if it wasn’t about the endorsement deals most players would choose TaylorMade because we believe our products work better.”

At the same time he is also quick to point out how TaylorMade’s ball innovation and club technology benefits consumers. Just before Abeles and I sat down to chat he was watching a single-digit handicap player for a few minutes, paying attention to his launch monitor numbers.

“He’s not only picking up ball speed with TP5 but with TwistFace he’s hitting it straighter,” Abeles said, “and because he’s a 4-8, the likelihood of him hitting it across the face more frequently means that product probably works better for him than it would Dustin Johnson. Critically important for us in every category to meet that standard. Our company mission is being the best performance golf brand in the world but the compass of TaylorMade is to help golfers at all skill levels play better. If we can’t bring a product to market that’s measurably better for amateur golfers we won’t do it.”

Woods’s Tour Championship win Sunday at East Lake was historic on multiple levels but, as an equipment analyst, it was tough to ignore its significance business wise. His 80th career victory was the first for Tiger as a member of TaylorMade’s tour staff (also a first for Woods playing the Bridgestone Tour BXS ball) and certainly validated the company making the investment in his multi-year contract.

This is particularly telling.

“We know how hard he’s working. We’re with him every step and he’s with us. He’s one of the greatest players in golf history so just to be aligned with him is exciting. Tiger will have a big role in the future of TaylorMade whatever happens from here but we think his return to competition isn’t only likely, it’s probable. I’ve gotten to know him well in the past year and just like Rory, Justin, Dustin, Jason, Jon, they’re not only great players but terrific people. What you see in those athletes, what you see in Tiger Woods is what you see in our company. You know this from covering our brand as long as you have but of all the brands in golf today, and there are some great ones in our industry, TaylorMade might be the most authentic. We want the athletes who play our products to be consistent with that authenticity, to share our passion and our love for the game. In my role I get to make those decisions. It’s why we signed Tiger Woods and Rory McIlroy. I saw that passion and their love for the game. I wanted that for TaylorMade,” he added.

Trusting his instincts on Woods? Not only has it proven to be a windfall for David Abeles and TaylorMade but in terms of historical significance, and without hyperbole, the decision to sign the 80-time tour winner might well become one of the best in the brand’s 39-year history.